Big three banks dominating Asian corporate banking scene
HSBC has 19.1 percent of primary relationships, down slightly from 20.8 percent at the beginning of 2003, while Standard Chartered is up to 15.6 percent from 14.9 percent, and Citigroup has increased its share to 13.9 percent from 13.2 percent in January 2003.
Regional banks DBS and UOB have increased their share of the market over the past fifteen months but OCBC and Bank of China have seen their share decrease.
"Local banks provide good service when dealing in their local currencies but they continue to struggle when asked to provide large corporates with world-class products and services that allow them to improve their working capital and supply chain management efficiencies," East & Partners principal analyst Paul Dowling said.
"Transaction banking is a scale dependent business and only banks that achieve scale can justify reinvesting in the business to build a platform of customer service and transaction execution excellence. This is why large regional and international banks, such as HSBC, Standard Chartered and Citigroup, consistently outperform their local service providers in this area," he said.
The research program is based on regular interviewing programs with CFOs and Treasurers from the 1,000 largest corporates across the region – Hong Kong, Singapore, China, India, Indonesia, Malaysia, Philippines, South Korea, Taiwan and Thailand – about their banking relationships.
"Most players in these banking markets are being increasingly challenged by customer expectations and although service provider performance is climbing, customer expectations are rising more quickly," Mr Dowling said.
The three most important service factors of the 26 covered in the research are:
Quality of Transaction Execution
Quality of Overall Service Delivery
Response Times on Queries and Quality of Bank’s Relationship Management
By contrast, the three least important factors to corporates are:
Usefulness of Bank’s Website
Reputation / Name of the Bank
Social Interaction
"Indirect, web-based tools and techniques that have been used by banks to grow and extend their existing corporate transaction relationships are not highly regarded by their corporate customers in Asia. These customers demand a personal approach to service delivery and relationship management," Mr Dowling said.
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For further information please contact:
Paul Bartholomew
Executive Editor
East & Partners Pty Ltd
Tel: +61-2-9222 1588
Mob: +61-410 400 156
paul.b@eastandpartners.com